2014 the strongest year for small business growth since 2001
Small and mid-sized enterprise income growth was 7.4% in 2014, Barclays Bank data shows
Annual income growth for the UK’s small businesses reached the highest it has been for 14 years according to data released by Barclays Bank.
Year-on-year, small enterprise income growth rose 7.4% in 2014 as a whole.
There was a 1.8% increase in income from Q3 to Q4, and activity levels in Barclays’ small business customer accounts are currently 24% above their level in Q1 2000 and 28% higher than the low point of Q2 2009.
By region, it was small businesses in London, the North West and the East Midlands with the strongest aggregate performance – but income growth was strongest in the North East and South West and positive in all regions of England and Wales.
Health and education showed some of strongest growth in the year to Q4 2014, but real estate generated the largest share of revenue growth, accounting for more than a third of small business customers’ income.
This was in spite of a decline in bank lending to the sector which the Bank of England’s Trends in Lending report cite as a reason for the contraction of small business loans overall.
However, with larger firms being responsible for most revenue generated in technology, the sector did not perform as well as expected, alongside retail and manufacturing.
To produce the data, Barclays tracked the total level of income of 600,000 small business customers with turnover of less than £5m – the index is seasonally adjusted to account for short-term volatility.
Head of business banking at Barclays, Adam Rowse commented: “The latest GDP figures show growth of 0.5% in the final quarter of 2014, putting growth for the full year at 2.6%. These official estimates back up what we have already seen in the incomes of our small business customers.
“Last year was the best for small business growth since before 2001 and it’s good to see a strong finish to the year, which is encouraging for businesses to get the head start they need in 2015.”